BILL NUMBER: S8098
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the public health law and the insurance law, in relation
to pharmacy benefit management services and durable medical equipment
 
PURPOSE OR GENERAL IDEA OF BILL:
To include Durable Medical Equipment Third-Party Administrators in the
definition of Pharmacy Benefit Manager
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends section 280-a of the public health law to provide a
definition of "Durable Medical Equipment" and adds Third-Party Adminis-
trator services to the list of services Pharmacy Benefits Managers
provide.
Sections 2-9 amend various sections of the public health law and insur-
ance law to make conforming changes to the statute governing pharmacy
benefit managers.
 
JUSTIFICATION:
Third-Party Administrators (TPAs) frequently act as intermediaries
between Managed Care Organizations (MCOs) and Durable Medical Equipment
(DME) providers, adding an unnecessary layer of complexity to the
healthcare system. Rather than prioritizing patient needs, TPAs often
reduce the reimbursement rates that DME providers receive from insurance
companies and Medicaid, while retaining an average fee of 15% of the
total payment. As demand for DME continues to grow across the state, the
suppressed rates have contributed to a 45% reduction in the number of
DME providers since 2010, ultimately limiting patient access to essen-
tial medical supplies, especially in underserved and rural communities.
Despite performing functions similar to Pharmacy Benefit Managers
(PBMs), TPAs in New York currently operate outside the state's PBM stat-
ute. Bringing TPAs under the same regulatory framework - by classifying
them as PBMs and requiring licensing through the Department of Financial
Services - would shine a light on this opaque sector, ensuring account-
ability for cost-containment measures and fair reimbursement practices.
Without such oversight, TPAs disrupt the continuum of care and offer no
demonstrable benefit to ratepayers or patients, while eroding the finan-
cial viability of smaller providers and placing undue pressure on a
vital healthcare supply chain. Establishing clear oversight standards
would promote greater transparency, preserve patient choice, and help
sustain a robust network of DME providers statewide.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None noted.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S8098: 280-c public health law, 111-a insurance law, 111-a(a) insurance law, 2901 insurance law, 2901(b) insurance law, 2902 insurance law, 2902(b) insurance law, 2905 insurance law, 2905(b) insurance law, 2906 insurance law, 2906(b) insurance law, 3217-a insurance law, 3217-a(g) insurance law, 4324 insurance law, 4324(g) insurance law, 4408 public health law, 4408(8) public health law